Anti-Money Laundering Regulations for Letting Agents - What You Need to Know
Letting agents who rent out any properties that individually bring in rent of €10,000 or more per month (approximately £8,700 at the time of writing) must comply with tough anti-money laundering regulations. Although the law dictates that letting agents must follow the rules laid down in the Fifth Money Laundering Directive, they cannot register with HMRC until May 2020. After May, they must register online within 12 months. Keep reading to find out more about anti-money laundering regulations for letting agents.
Compliance With Anti-Money Laundering Regulations for Letting Agents
When it comes to compliance with anti-money laundering regulations for letting agents, you need to put a number of robust checks in place. This includes performing due diligence on landlords and tenants of properties that yield €10,000 per month.
Letting agents also need to show that they have made a ‘reasonable’ effort to discover details about the ownership and structure of any legal trusts, companies, foundations and other legal estates that act as their customer. They are expected to ask for information on where the customer’s funds come from, how their business relationship works and other details behind the transactions in question.
They have to show that they have robust systems in place to check that deposits are authentic before they accept them. In addition, letting agents must draw up written anti-money laundering policies. These must include undergoing a new risk assessment for the business and putting in place training for staff.
Which Lettings Apply?
The anti-money laundering regulations for letting agents apply to all new tenancies that began following 10th January 2020. They also come into play whenever agents renew tenancies that existed before that date.
If You Are Already Registered as for Sales
Letting agents who also sell properties should have already registered for the anti-money laundering directive. However, they should also inform HMRC that they also meet the letting requirements. They should apply through the HMRC online registration system once it is running. This is expected to happen in May 2020.
Help With Preventing Money Laundering
A straightforward risk assessment and clear staff policy for preventing money laundering is essential for compliance with the rules. In order to make sure the letting agent meets all of its obligations, they should appoint a Money Laundering Reporting Officer. This provides a point of focus for all matters to do with anti-money laundering regulations for letting agents.
Specific money laundering reporting officers are essential in helping provide regular training for staff. This training should give employees the tools to spot transactions that might relate to money laundering or potential terrorist financing.
What Happens if Companies Ignore Anti-Money Laundering Regulations for Letting Agents
If businesses ignore anti-money laundering regulations for letting agents, there are severe repercussions. HMRC could impose civil penalties. There is also the possibility of criminal prosecution and any non-compliant letting agent can be hit with an unlimited fine and even two years in prison as a result.
Help With Letting Agent Admin
If you would like help with your letting agent admin such as compliance with anti-money laundering policies, consider outsourcing your property management services. We deal with the legalities of looking after rental properties, as well as rent collection and chasing unpaid bills, property maintenance and more.
Speak to us today to find out how we can make your life easier, even as the requirements for letting agents become ever more complicated. Call 0208 5757630 to chat about your needs.